HARARE (Reuters) – Zimbabwe’s state-owned Kuvimba Mining House expects to finalise this month a deal agreed with two Chinese companies as it sticks with its $270 million lithium project on the basis lithium prices will recover, its CEO said on Monday.
Analysts expect robust sales of electric vehicles (EV) in China and the mothballing of some mines will this year stabilise lithium prices. They have fallen by more than 80% since their November 2022 peak due to oversupply and slower than expected EV sales growth.
CEO Trevor Barnard said Kuvimba expects prices to recover more strongly next year, although they were unlikely to reach the record levels seen in 2022.
“That was obviously a bubble driven by huge demand forecasts and huge positive sentiment around lithium,” he said of the 2022 prices.
Zimbabwe, Africa’s biggest producer of lithium, has attracted more than $1 billion of investment in lithium projects since 2021, mostly from Chinese battery metal companies, company filings show.
Without naming the Chinese investors, Barnard said he expected them to finalise their deal with Kuvimba to build a 600,000 metric tons per year lithium concentrator at Sandawana mine.
“We did a review of the Sandawana project and we found that it is still a very good project to proceed with because of the quality of the resource and the size of the resource as well,” Barnard said.
Zhejiang Huayou Cobalt, Sinomine Resource Group, Chengxin Lithium Group, Yahua Group and Canmax are some of the Chinese firms that have acquired lithium assets in Zimbabwe as the Asian country seeks to consolidate its position in the global battery metal value chain.
(This story has been refiled to fix a typo in paragraph 6)
(Reporting by Nyasha Chingono; Editing by Nelson Banya and Barbara Lewis)
